Losing F1 could prove the greatest cost of all

If Melbourne had not outbid Adelaide for the Australian Grand Prix nearly 20 years ago, the formula one race would have been long gone from these shores.

The South Australian capital would inevitably have lost the event because it was becoming too expensive and too big.

As popular and much loved as the Adelaide GP was from 1985-95, the move to Melbourne secured Australia's place on the F1 world championship calendar for at least another two decades.

The Australian Grand Prix's future is coming to another crossroads with Melbourne's existing contract finishing with the 2015 race and the decision to keep or quit is once again about whether this nation wants to remain a part of the world's biggest annual sporting competition. If the Victorian government does not renew the race, Melbourne will not just lose an iconic - if challenging - event that has become one of the pillars of the city's international fame.

Should Victoria abandon its problem sporting child rather than support its transition to maturity in what would be a symbolic 21st running in 2016, Australia's F1 round would almost certainly be lost forever.

There is no obvious viable alternative to Melbourne and several other countries are prepared to pay much, much more to take its place.

Even in the unlikely event of Sydney, Brisbane or Perth stepping up with a takeover or replacement bid, F1 boss Bernie Ecclestone would only consider the most spectacular and financially impractical proposals.

He wants an Australian race that portrays Aussie chic. Albert Park fulfils the criteria.

While Ecclestone has a soft spot for Australia, it is not soft enough to ignore fatter fees from elsewhere if another city here cannot match the setting of Albert Park.

So we come back to Melbourne as not only the established home of the Australian Grand Prix, but our best and probably only hope of keeping the event.

But the argument about whether the Melbourne GP should be renewed after 2015 comes down to its value to the city and the state. And that is very much more than about what the race costs each year.

You can, of course, argue that $57 million last year and likely rising again this year is not the best use of public money.

But the greater argument is that it is an important and cost-effective investment in maintaining Melbourne's international brand.

Forget claims of direct economic benefits derived from spending by visitors. What the grand prix at Albert Park does is promote Melbourne to the world, further reinforcing its visibility and status as a sporting and cultural centre.

Along with the AFL grand final, Melbourne Cup and Australian Open, the race underpins the city's international profile and awareness.

After 17 years, the Albert Park GP has enhanced - and become synonymous with - Melbourne's image overseas as an attractive and sophisticated destination.

While it is difficult to put a price on perception, it does not take a leap of faith to accept that losing it would harm the city's international standing, which has a tangible commercial benefit. You don't know what you have until it's gone and if the grand prix goes in a few years, it will leave a gaping hole that would be impossible to fill on an annual basis as far as big international events go.

Ironically, it has a local image problem that is inconsistent with its popularity. Born in controversy and dogged by it ever since, the race nevertheless continues to attract more than an estimated 100,000 people in a bad year - and more than 110,000 the past two years.

There are signs next month's event could attract closer to 120,000 on race day.

The Melbourne GP is big and popular by any measure locally, and its attendance is among the largest of any F1 race.

Criticism of the cost of the race has been unrelenting since 1996 and that it has persisted is the fault of previous Australian Grand Prix Corporation managements.

The organisation long ago lost the PR war with its intransigent, arrogant and defensive attitude to critics, which persisted until relatively recently.

Instead of quoting spurious global television audience figures and rubbery economic benefit data, they should have hammered home the most relevant justification.

Staging the race at Albert Park is an extension of the branding and promotion of Melbourne that is very much cheaper than a conventional advertising campaign.

Like the Australian Open, the Australian Grand Prix is a jewel in Melbourne's sporting crown that comes with a price. It's just calculated differently.

When the Victorian government begins renewal talks with Ecclestone last next year, it will be a clear-cut choice. Use it - or lose it.

The real question is: can Melbourne afford not to continue with the grand prix if it wants to remain Australia's international sporting capital?